-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pe78YjZHolvYkOTnmeNgkmsbY2pkTViLlTSTiaM6NvZH1X5WJ7nVSAzIa2vPrZJO 1FmWydCbxuAuY6P0z5gkEA== 0000278165-96-000001.txt : 19960216 0000278165-96-000001.hdr.sgml : 19960216 ACCESSION NUMBER: 0000278165-96-000001 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960214 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: GLOBAL GAMING & TECHNOLOGY INC CENTRAL INDEX KEY: 0000278165 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS MANUFACTURING INDUSTRIES [3990] IRS NUMBER: 020314487 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09047 FILM NUMBER: 96520133 BUSINESS ADDRESS: STREET 1: 2575 S HIGHLAND DR CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027940336 MAIL ADDRESS: STREET 1: 2575 S HIGHLAND DRIVE CITY: LAS VEGAS STATE: NV ZIP: 89109 FORMER COMPANY: FORMER CONFORMED NAME: GAMEX INDUSTRIES INC DATE OF NAME CHANGE: 19890928 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Six Months Ended December 31, 1995 Commission File Number: 0-9047 GLOBAL GAMING AND TECHNOLOGY, INC. (Exact Name of Registrant as specified in its charter) Delaware 02-0314487 (State or other jurisdiction of (IRS Employer Identification incorporation or organization) Number) 2575 South Highland Drive, Las Vegas, Nevada 89109 (Address of principal executive offices) Registrant's Telephone Number, including Area Code: 702/794-0336 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. X YES NO As of December 31, 1995, there was issued and outstanding 26,378,577 shares of Common Stock of Registrant. The aggregate market value of the shares of Common Stock held by non-affiliates (without admitting that any person whose shares are not included in determining such value is an affiliate) was not available because the prices for such shares are not quoted by the National Association of Securities Dealers through NASDAQ, its automated system for reporting quotes. Global Gaming and Technology, Inc. Form 10-Q Quarter Ended December 31, 1995 TABLE OF CONTENTS PART I - Financial Information Item I - Financial Statements Item II - Management's Discussion and Analysis of Financial Condition and Results of Operations PART II - Other Information PART I Global Gaming and Technology, Inc. Financial Statements December 31, 1995 (See Accountant's Review Report) Global Gaming and Technology, Inc. Financial Statements December 31, 1995 (See Accountant's Review Report) TABLE OF CONTENTS Page Accountant's Review Report 1 Balance Sheet 2 Statement of Operations and Deficit 3 - 4 Statement of Cash Flows 5 Summary of Significant Accounting Policies 6 - 7 Notes to Financial Statements 8 - 10 To the Board of Directors and Stockholders of Global Gaming and Technology, Inc. We have reviewed the accompanying balance sheet of Global Gaming and Technology, Inc. as of December 31, 1995 and the related statements of operations, deficit, and cash flows for the three months and six months ended December 31, 1995 and 1994, in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of the management of Global Gaming and Technology, Inc. A review consists principally of inquiries of company personnel and analytical procedures applied to financial data. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statement taken as a whole. Accordingly, we do not express such an opinion. Based on our review and subject to the preceding paragraph, we are not aware of any material modifications that should be made to the accompanying comparative financial statements in order for them to be in conformity with generally accepted accounting principles. The financial statements for the year ended June 30, 1995 were audited by us and we expressed an unqualified opinion on them in our report dated September 11, 1995, but we have not performed any auditing procedures since that date. Las Vegas, Nevada February 9, 1995 - 1 - Global Gaming and Technology, Inc. Balance Sheet December 31, 1995 and June 30, 1995 (See Accountant's Review Report)
December 31 June 30 1995 1995 (Unaudited) ASSETS CURRENT ASSETS Cash $ 14,792 $ 24,081 Note Receivable-Current (Note 1) 110,159 106,345 ----------- ----------- 124,951 130,426 ----------- ----------- PROPERTY AND EQUIPMENT - At Cost Net of Accum Depreciation -0- -0- ----------- ----------- OTHER ASSETS Note Receivable (Note 1) 582,850 642,063 Deposits 300 300 ----------- ----------- 583,150 642,363 ----------- ----------- Total Assets $ 708,101 $ 772,789 =========== =========== LIABILITIES AND STOCKHOLDER'S DEFICIENCY CURRENT LIABILITIES Accounts Payable & Accrued Exp 1,073,219 1,042,044 Notes Payable (Note 3) 1,173,785 1,173,785 ----------- ----------- 2,247,004 2,215,829 LONG-TERM LIABILITIES Notes Payable - Net of Current Maturities (Note 3) -0- -0- ----------- ----------- STOCKHOLDER'S DEFICIENCY (Note 4) Preferred Stock, $.01 par value, 1,000,000 shares authorized, none issued. -0- -0- Common Stock, $.01 par Value, 27,000,000 Shares Authorized, 26,378,577 shares issued (Including 51,382 held in the company name at no cost). 263,786 263,786 Paid in Capital in excess of par value 3,395,062 3,395,062 Deficit ( 5,197,751) ( 5,101,888) ----------- ----------- ( 1,538,903) ( 1,443,040) ----------- ----------- Total Liabilities and Stockholders' Deficiency $ 708,101 $ 772,789 =========== =========== The Accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 2 -
Global Gaming and Technology, Inc. Statement of Operations and Deficit For the Three Months Ended December 31, 1995 and the Six Months Ended December 31, 1995 (See Accountant's Review Report) (Unaudited)
3 Mnths Ended 6 Mnths Ended December 31 December 31 1995 1995 REVENUE AND INCOME Royalty & Interest Income $ 2,524 $ 5,600 ----------- ----------- COSTS AND EXPENSES Professional Services 38,985 53,082 Interest 23,087 46,174 Other General & Administrative 1,060 2,207 ----------- ----------- Costs and Expenses 63,132 101,463 ----------- ----------- Loss from Operations before Extraordinary Item ( 60,608) ( 95,863) Extraordinary Item -0- -0- ----------- ----------- Net Income (Loss) ( 60,608) ( 95,863) ----------- ----------- Deficit Beginning of Period as Previously Reported ( 5,137,143) ( 5,101,888) Prior Period Adj -0- -0- ----------- ----------- Deficit Beinning of Period as Restated ( 5,137,143) ( 5,101,888) ----------- ----------- Deficit End of Period ( 5,197,751) ( 5,197,751) =========== =========== Net Income (Loss) per Common Share (Note 5) ($ .0023) ($ .0036) =========== =========== The accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 3 -
Global Gaming and Technology, Inc. Statement of Operations and Deficit For the Three Months Ended December 31, 1994 and the Six Months Ended December 31, 1994 (See Accountant,s Review Report) (Unaudited)
3 Mnths Ended 6 Mnths Ended December 31 December 31 1994 1994 REVENUE AND INCOME Royalty & Interest Income $ 4,667 $ 14,803 ----------- ----------- COSTS AND EXPENSES Professional Services 21,877 29,219 Interest 28,332 57,198 Other General & Administrative 2,456 4,635 ----------- ----------- Costs and Expenses 52,665 91,052 ----------- ----------- Loss from Operations before Extraordinary Item ( 47,998) ( 76,249) Extraordinary Item - Gain on Extinguishment of Debt -0- 48,397 ----------- ----------- Loss for the period ( 47,998) ( 27,852) ----------- ----------- Deficit Beginning of Period as Previously Reported ( 4,944,109) ( 4,954,519) Prior-Period Adjustment Income Taxes -0- ( 9,736) ----------- ----------- Deficit Beginning of Period as Restated ( 4,944,109) ( 4,964,255) ----------- ----------- Deficit End of the Period ($4,992,107) ($4,992,107) =========== =========== Loss per Common Share (Note 5) ($ .0018) ($ .0010) =========== =========== The accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 4 -
Global Gaming and Technology, Inc. Statement of Cash Flows For the Six Months Ended December 31, 1995 and 1994 (See Accountant's Review Report) (Unaudited)
December 31 December 31 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) ($ 95,863) ($ 27,852) Non-Cash Items Included in Net Income Depreciation -0- -0- Changes in Accounts Payable 31,175 24,045 Note Receivable 55,399 109,483 Loan to Officer -0- ( 5,000) Prior-Period Adjustment Income Taxes -0- ( 9,736) ----------- ----------- ( 9,289) 90,940 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Capital Expenditure -0- -0- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Repayment of Notes Payable -0- ( 70,376) ----------- ----------- Net Increase (Decrease) in Cash ($ 9,289) $ 20,564 =========== =========== The accompanying Summary of Significant Accounting Policies and Notes are an integral part of these financial statements. - 5 -
Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements December 31, 1995 THE COMPANY The Company was incorporated in the State of Delaware in 1973 and has elected June 30 as its year end. The Company has ben engaged in the research, devel- opment, manufacture, and marketing of electronic gaming devices and coinless games of chance. PROPERTY AND EQUIPMENT Property and equipment, including significant improvements thereto, are carried at cost, less accumulated depreciation. Expenditures for repairs and maintenance are charged to expenses as incurred. When assets are retired or disposed of, the cost and related accumulated depreciation are removed from the accounts. Gains and losses from the disposition of property are included in operations. Depreciation is provided using Straight-Line methods. INCOME TAXES Because of a net operating loss carry forward from prior years, the Company does not have an income tax obligation. LITIGATION On or about May, 1994, the Company instituted litigation in the United States District Court for the District of New Jersey for patent infringement against Bally's Park Place, Inc., Trump Plaza Associates, Trump Taj Mahal Associates, Trump Castle Associates, The Claridge Hotel and Casino Corporation, Resorts International Hotel, Atlantic Showboat Inc., and Greate Bay Hotel and Casino, Inc. Global was seeking damages to adequately compensate for the past infringement of the patent in suit by each of the defendants together with interest and cost. As a result of this action, on June 30, 1994 the Company entered into a license agreement with Bally Gaming, whereby the Company grants a non exclusive, personal, non-transferable right and paid-up license to make, have made, use and sell, test, lease or otherwise dispose of licensed products under claims of this license patent. The Company will receive a non- refundable net royalty payment in the amount of one million dollars ($1,000,000). (See Note 1 for details) - 6 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements December 31, 1995 LITIGATION - (Continued) In this law suit, Global Gaming and Technology, Inc. contends that the defendants named in the complaint infringed upon a patent owned in connection with the manufacture, use or sale of slot machines driven by stepper motors. This case is in its early stage, and the Company intends to prosecute the matter fully until such time as the case is either tried or settled to the Company's satisfaction. On or about July 6, 1994, IGT North America, Universal Distributing of Nevada, Inc. and Sigma Game, Inc. filed a civil complaint in the United States District Court for the District of Nevada against Global Gaming and Technology, Inc. for declaratory judgment of non-infringement, invalidity, unenforceability and laches. This lawsuit arose as a result of the New Jersey litigation (see above paragraph), and was filed for the purpose of having Global's patent declared invalid. The Company is vigorously contesting the allegations alleged in the complaint and has filed a counter-claim for infringement against IGT North America, Universal Distributing of Nevada, Inc. and Sigma Game, Inc. Inasmuch as this case is early in the discovery process, its counsel cannot, yet, render a more definite opinion with respect to this case. At this time, the Company believes that its only financial exposure in this case is (i) the financial impact of having its patent declared invalid (which patent expired at the end of July 1995) and (ii) the payment of any fees and costs that may be awarded by the court, if IGT, Universal and Sigma prevail on their claims, the amount of which exposure is difficult to predict at present. The Company will be incurring legal costs regarding the prosecution of its infringement claims. Per counsel of the Company, at present it is very difficult to determine these future legal costs. On September 11, 1995, the Court ordered that discovery in this case will close on May 1, 1996 and set a trial date of September 9, 1996. In connection with this ruling, the Court also denied IGT's, Sigma Game's and Universal Distributing's motion to bifurcate the damages and liability phases of this case. - 7 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements December 31, 1995 NOTE 1 - Note Receivable The total amount due pursuant to this promissory note shall be paid in sixty consecutive installments, pursuant to the following schedule: A. $10,166.66 per month shall be paid on the first day of each month, starting on July 1, 1994, and continuing through December 1, 1996. B. $21,500.00 per month shall be paid on the first day of each month, starting on January 1, 1997, and continuing through June 1, 1999. C. $50,000 was received by the Company on July 1, 1994. An additional $112,717 was received during the year ended 6/30/95. $71,000 was received in the six months ended 12/31/95. The scheduled payments under this note have been discounted at 8% to reflect the present value of the note. Note Receivable - Current Portion $107,484 Note Receivable - Long Term 582,850 -------- Total as of September 30, 1995 $690,334 ======== The amount of this royalty payment is secured by a note from Bally's Gaming and the collectability of this note is not doubtful. Since June 30, 1994, the company has been receiving timely monthly installment payments on this note. Also included in Note Receivable - Current Portion is a Note for $2,675 due from a local firm for the sale of all inventory. NOTE 2 - Property and Equipment Furniture and Equipment $60,843 Less: Accumulated Depreciation ( 60,843) -------- $ - 0 - ======== - 8 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements December 31, 1995 NOTE 3 - Note Payable
Current Non-Current Maturities Maturities Total Michael Wichinsky Payable upon demand. Interest payable quarterly at 8% $ 736,389 $ - 0 - $ 736,389 Michael Wichinsky Payable upon demand. Interest payable quarterly at 10% 105,490 - 0 - 105,490 William T. O'Donnel, Sr. Payable upon demand. Interest payable quarterly at 8% 312,463 - 0 - 312,463 State of New Jersey Payable in monthly installments of $1,363 including interest. This note is in arrears. 19,443 - 0 - 19,443 ---------- --------- ---------- $1,173,785 - 0 - $1,173,785 ========== ========= ========== Interest is accrued on these notes at 8%. Accrued interest payable at 12/31/95 is $1,065,044.
NOTE 4 - Stockholders' Deficiency
Paid in Capital in Number of $.01 Par Excess of Shares Value Par Value (Deficit) ----------- -------- ---------- ------------ Balance at June 30, 1994 26,378,577 $263,786 $3,395,062 ($4,954,519) Net Income (Loss) For The Year Ended June 30, 1995 ( 186,030) Extraordinary Item - Gain 48,397 Prior Period Adjustment ( 9,736) ----------- -------- ---------- ------------ Balance at June 30, 1995 26,378,577 $263,786 $3,395,062 ($5,101,888) ----------- -------- ---------- ------------ Net Income (Loss) For the six months ended 12/31/95 ( 95,863) ----------- -------- ---------- ------------ Balance at 12/31/95 26,378,577 $263,786 $3,395,062 ($5,197,751) =========== ======== ========== ============
- 9 - Global Gaming and Technology, Inc. Summary of Significant Accounting Policies and Notes to Financial Statements December 31, 1995 NOTE 5 - Earnings (Loss) Per Share Income (Loss) per share was computed by dividing the net income or loss by the weighted average number of shares outstanding during the period. - 10 - ITEM II - Management's Discussion and Analysis of Financial Condition and Results of Operations As of December 31, 1995, the Company had negative working capital of $2,122,053. The Company has no commitments for capital expenditures. As of December 31, 1995, the Company had negative stockholders' equity of $1,538,903. During the six months ended December 31, 1995, the Company realized total revenues of $5,600 and expenses of $101,463. GLOBAL GAMING AND TECHNOLOGY, INC. has been engaged in the design, manufacture, and marketing of electronic microprocessor-controlled gaming machines. The Company, which was incorporated in Delaware in 1973, maintains its principal offices at 2575 South Highland Drive, Las Vegas, Nevada 89109. No machines have been manufactured during the six months ended December 31, 1995. The Company has been dormant during the six months ended December 31, 1995. The Company does not anticipate any shortage of raw materials or parts. Patents are the subjects of current litigation. The Company is not subject to seasonal variation in sales. Primary North American markets for gaming devices are Las Vegas, Nevada, and Atlantic City, New Jersey. Because of the high cost of obtaining gaming licenses in Nevada and New Jersey, the Company does not sell its machines in these states. Compared to Nevada and New Jersey, other markets are relatively immaterial, but growing. The Company does not have the resources to apply for licenses in Nevada and New Jersey at the present time. The Company will be incurring legal costs regarding the prosecution of its infringement claims. Per counsel of the Company, at present it is very difficult to determine these future legal costs. The gaming industry is highly competitive, and the Company is at a severe competitive disadvantage because of its size and lack of resources. The Company has not generated any sales in the last three months and does not anticipate sales in the foreseeable future. The Company employs approximately 1 person on a part-time basis. The lack of gaming licenses in Nevada and New Jersey is a severe detriment to growth. In effect, sales are confined to much smaller and less lucrative markets. During the six months ended December 31, 1995, the Company was unable to achieve any sales. PART II - OTHER INFORMATION ITEM 1 - Legal Proceedings On or about May, 1994, the Company instituted litigation for patent infringement against Bally's Park Place, Inc. and several other New Jersey hotels and casinos. Global was seeking damages to adequately compensate for the past infringement of the patent in suit by each of the defendants together with interest and costs. As a result of this action, the Company entered into a license agreement with Bally Gaming on June 30, 1994 whereby the Company grants a non exclusive, personal, non-transferable right and paid-up license to make, have made, use and sell, test, lease or otherwise disopose of lecensed products under claims of this license patent. The Company is receiving a non-refundable net royalty payment in the amount of one million dollars ($1,000,000) in periodic installments. In this lawsuit, Global Gaming and Technology, Inc. contends that the defendants named in the complaint infringed upon a patent owned in connection with the manufacture, use or sale of slot machines driven by stepper motors. On or about July 6, 1994, IGT, Universal Distributing of Nevada, Inc. and Sigma Game, Inc. filed a civil complaint against Global Gaming and Technology, Inc. for declaratory judgment of non-infringement, invalidity, unenforceability and laches. This Nevada lawsuit arose as a result of the New Jersey litigation (see above paragraph), and was filed for the purpose of having Global's patent declared invalid. The Company is vigorously contesting the allegations alleged in the complaint and have, in fact, filed a counter-claim for infringement against these defendants. It is expected by Global, that the pretrial process will continue through fiscal year 1995, with trial following no earlier than fiscal year 1996. At present the New Jersey lawsuit has been stayed in deference to the Nevada case which is presently proceeding. Per counsel of the Company, presently it is too early in the discovery process to render a more definitive opinion regarding the ultimate outcome of these lawsuits. ITEM 2 - Changes in Securities None. ITEM 3 - Defaults Upon Senior Securities Non-Applicable ITEM 4 - Submission of Matters to a Vote to Security Holders Non-applicable PART II - OTHER INFORMATION (Continued) ITEM 5 - Related Party Transactions The Debt amount of $1,048,852 has been restructured by agreement between Michael Wichinsky (a 30% stockholder of the Company) and William T. O'Donnell, Sr. (a 22% stockholder of the Company), whereby the Company owes Michael Wichinsky the amount of $736,389 and owes William T. O'Donnell, Sr. the amount of $312,463 under the same terms and conditions agreed upon for the original advancement of funds. These notes are payable upon demand and interest is payable quarterly at 8% per annum. These funds were used for Working Capital and were in addition to the amounts evidenced by formal notes payable (See Note 3 to financial statements). Additionally, the Company owes $105,490 to Michael Wichinsky (See Note 3 to the Financial statements). SIGNATURES Pursuant to the requirements of Section 13 or Section 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DATED: 2/13/96 ------------------- GLOBAL GAMING & TECHNOLOGY, INC. BY: Mark Sarason -------------------------- Mark Sarason President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons as a majority of the members of the Board of Directors of the registrant and in the capacities and on the dates indicated. DATED: 2/13/96 ----------------------- Mark Sarason -------------------------- Mark Sarason Secretary/Treasurer & Director EX-27 2 ARTICLE 5 FIN. DATA SCHEDULE FOR 2ND QTR 10-Q
5 1 6-MOS Jun-30-1996 Jul-01-1995 Dec-31-1995 14792 0 110159 0 0 124951 0 0 708101 2247004 0 263786 0 0 (1802689) 708101 0 5600 0 0 101463 0 46174 (95863) 0 (95863) 0 0 0 (95863) .004 .004
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